Digital cash and method of commerce

FIELD OF INVENTION

The present invention generally relates to the field of electronic commerce, and in particular to the field of an exchange medium for use in electronic commerce, and more specifically to a method and means of exchange for use in managed commercial transactions via the Internet.

BACKGROUND OF THE INVENTION

Trading was first conducted through a system of exchange trade, in which items of similar value were exchanged directly. The exchange trade system has obvious limitations and various means of exchange have been developed many years ago to simplify the trade process. One of the first assets used for the exchange was a token. The first tokens were items that had real value, such as gemstones or shells. Later coins were minted in precious metals such as gold or silver. Eventually, the tokens began to represent economic value, despite not actually having real value. For example, United States coins are tokens that represent a value greater than the metal value of the coin itself. Tokens are available in a limited number of units and are awkward when used in large numbers, so symbolic money has evolved. Symbolic money, such as modern paper money or a bank check, can represent any monetary value without changing its physical geometry. Symbolic money was first directly linked to a true value located elsewhere than was the gold at Fort Knox, which supported the United States dollar for many years. With the abandonment of gold as a standard, our modern symbolic money is now backed by the promise and trust given to the money issuer by the money user.

A large proportion of the value of the current economy is in the form of electronic balances maintained by the records of authorizations issued, representing the value of accounts opened on behalf of users. Transactions of such economic value are routinely executed by electronic means. Electronic accounts include both debit and credit accounts. Physical assets such as bank checks, debit and credit cards sometimes represent these electronic balances. Credit and debit accounts have worked well for decades, but they have certain disadvantages that are becoming increasingly detrimental to the full evolution of the economic potential in the digital economy.

A small but rapidly growing part of the world trade is made over the Internet. Currency and money are impractical as a medium of exchange for this part of the economy. Credit and debit accounts are used for Internet commerce, but the cost of opening, using and maintaining such accounts has limited their use for digital commerce, especially for small business. Furthermore, in order to use a credit or debit account, the identity of the user must be kept confidential in order to avoid fraudulent transactions. Therefore, there is a low level of consumer privacy in such transactions. In addition, the market is generally reluctant to provide up-to-date credit and debit account information due to the inherent unreliability of internet communication. These constraints encouraged inventors to develop alternative methods and means of exchange for current affairs.

United States Patents 5,590,197, issued December 31, 1996, to Chen et al., 5,753,899, issued May 19, 1998, to Gomm et al. and 5,857,079, issued Jan. 5, 1999, discover alternative monetary systems that target the support of trading in the digital age. These systems are based on the use of smart cards, that is, a debit or credit card that contains a small microprocessor and has a memory capability. While these systems enhance standard debit / credit card systems by providing enhanced flexibility and security, they still retain weaknesses such as high costs and low levels of consumer privacy and are less than perfectly suited to Internet trading.

Similarly, United States Patents 5,748,737, issued May 5, 1998, to Daggar and 5,815,657, issued September 29, 1998, to Williams et al., Disclose systems that function as an electronic wallet. An electronic wallet is a portable device that has a number of interfaces of digital data for organizing computational information and electronic business management. But these systems are also less than perfectly suited to online transactions because of their costs and privacy restrictions.

A United States patent issued to Kelmer on October 6, 1998, discovers a gaming device that uses a floppy disk or smart card that is purchased from a seller and has a pre-determined credit balance for use in a gaming device. This device is restricted to use by the seller in advance. Furthermore, such a device has a high risk of fraud because the economic value associated with the device is recorded in the user device itself and on the device.

United States Patent 5,710,886, issued January 20, 1998,

Christensen et al., Discovers a voucher delivery system using floppy or CD-ROM software. This system requires the user to use the telephone to contact a telemarketing representative in order to allow the software to print a voucher of commercial value. Such systems have limited use in a fully digital environment.

United States Patent 5,802,497, issued September 1, 1998, to Mannase, describes a method of conducting trading on a computer network in which the broker and / or seller issues electronic text. The text is used in an online exchange to infuse the consumer with a product or service. While this method is designed for a fully digital environment, it relies on the use of electronic text as a medium of exchange. The electronic text must be stored on the consumer's computer and transmitted over the network, with the risk that the text will be deleted or misread.

The above-mentioned patents are associated with this reference. In view of the requirements of the developing Internet economy and the limitations of the foregoing method, the purpose of the present invention is to provide an exchange medium that can be used for trading on the Internet. It is a further object of this invention to provide a method of conducting a commercial transaction through the Internet. It is a further object of the present invention to provide a means of exchange and a method of conducting an online transaction that provides security and anonymity for the user and which is economical to use for very low value transactions.

SUMMARY OF THE INVENTION

These and other objects of the invention are executed in an exchange medium comprising optical disk and data recorded on the optical disk and representing monetary value. The objects of the invention are further executed by the method of conducting transactions through the Internet, the method having the following steps: the operator associates the first monetary value with the optical disk; the customer receives an optical disc; the buyer receives the item information from the seller via the internet; the buyer communicates the price and optical disc data to the operator via the Internet; the operator provides the customer with an acknowledgment via the Internet; the buyer transfers the confirmation to the seller via the Internet; the seller confirms the authenticity of the confirmation with the operator via the Internet; the seller supplies the buyer with the item.

BRIEF DESCRIPTION OF THE DRAWINGS FIG. 1 FIG. 2 FIGS. 3-9 FIGS. 10-12 FIG. 13 shows a CD used as a means of exchange in accordance with the present invention.

shows the customer's computer screen as it would appear during e-commerce according to this invention, shows the customer's computer screen as it would look when the customer checks the value of the CD from Figure 1. shows the customer's computer screen as it would look when the customer discloses the historical value of the CD from Figure 1.

DETAILED DESCRIPTION OF THE INVENTION

The inventors have developed a new method of managing commercial transactions over the Internet using a medium of exchange that is unique and already familiar to the digital environment. The means of exchange of this invention is shown in Figure 1 in the form of an optical data storage means, such as a CD 10 filled with data representing monetary value. The method of writing data to the optical disk 10 and the method of reading data from the optical disk 10 are known in the field of optical data storage means. The optical disc 10 is shown in Figure 1, named CD MONEY, an unregistered label used by the person authorized by the invention to identify certain aspects of the invention.

The method of using the optical disk 10 of Figure 1 to conduct commercial transactions over a network is shown in Figure 2. A network may be any public or private electronic communications system, such as a telephone system, a satellite-connected network or the Internet. Figure 2 illustrates the type of communications that can be made between the seller 20, the buyer 30, and the operator 40. The seller 20 may be any person or organization that wishes to offer an item, such as a product or service. Buyer 30 can be any person or organization that wants to get an item from a seller through an online transaction. Operator 40 acts as a third party to accelerate the transaction between seller 20 and buyer 30.

The first step 1 in this method of trading is having the operator 40 prepare an optical disk 10 filled with data representing monetary value to the customer 30 in exchange for transferring 2 money from the customer 30 to the operator 40. This transfer can be done through the postal system or preferably as a monetary transaction that takes place between the customer 30 and the agent / exit of the operator 40. As this is a monetary transaction, the identity of the customer need not be disclosed.

Prior to step 1, providing the customer 30 with an optical disk 10, the operator 40 will assign an arbitrary monetary value to the optical disk 10. The optical disk 10 is filled with computer-readable data representing this monetary value and / or identification code for the optical disk 10. The operator 40 may include a data processing machine, such as a computer 12, in which the information is stored by linking data to optical disc 10 with monetary value. Optical disc 10 is preferably labeled to include a sign for that initial monetary value, such as $ 20, as shown in Figure 1. The optical disc may also include a prominent identification number 14. Identification number 14 may initially be hidden under the packaging. optical disc 10 or under a removable, removable coating known in the field of gambling. Since the optical disk 10 io has a hidden identification number 14, the initial buyer 30 of the optical disk 10 can be assured that the value of the optical disk 10 is equal to the initial value indicated on the front of the optical disk 10. If the identification number 14 is to be visible in time 30, the buyer 30 is warned that the current value of the optical disk 10 may be less than the initial value indicated on its front.

Once the buyer has obtained the optical disk 10, the buyer 30 can obtain information regarding the item from the seller 20 by communicating over the network in step 3 of Figure 2. In step 4, the seller 20 may transmit a message via the screen in the form of an order to the buyer 30. The message in the form of an order may identify the item for sale and the price associated with that item. Step 4 may also involve the download of a software component (not shown) prepared by the operator 40 to the vendor

20. This software component is used to guide the trading process. Customer 30 is prompted by the software component to insert an optical disc 10 into a CD drive connected to the computer from the customer and enter an identification number 14 from the optical disc 10. The software component on the computer from customer 30 is used to perform pre-verification to ensure that the optical disk 10 is such an optical disk as provided by the operator 40 and that the identification number 14 entered by the customer 30 is in the correct format . The software component on the customer 30's computer may be delivered to the customer 30 on the optical disk 10.

ίο In step 5, the software component on the computer transmits from the buyer a unique hidden marker from the optical disk 10 to the operator 40, together with the identification number 14 and the code number obtained from the message in the form of a command supplied by the seller 20. Operator 40 confirms that the optical disc 10 has a high enough monetary value to cover the price of the item that was purchased, and in step 6 returns the authorization code or other form of confirmation to the software component on the customer's computer 30. Customer 30 then confirms the price and v pass the receipt to the seller 20 in step 7.

In order to avoid fraudulent transactions, the vendor 20 may send a confirmation and additional hidden information in step 8 unique to CD 10 to the operator 40 for final confirmation. Operator 40 then fills in the invoice associated with the vendor 20 and debits the invoice associated with the CD 10 and sends a confirmation to the vendor 20 in step 9.

Seller 20 then delivers the item to buyer 30 to complete the transaction. Each of the steps described above can be electronically guided through a network such as the Internet. Although shown in Figure 1 with three separate areas, the buyer and seller can fulfill this invention themselves by having seller 20 take over the functions of operator 40. This embodiment may be economically practical for the seller with a very large amount. Similarly, the seller 20 of Figure 1 may conduct additional transactions in which the seller 20 issues its own exchange medium in the form of an optical disk filled with data representing monetary value. Seller 20 will then be able to accept transactions that comprise the operator's means of exchange or his own means of exchange.

This system can be used for transactions of high or low value. Due to the cost of credit losses and the cost of processing credit applications, credit and debit card transactions are uneconomic for low-value transactions. For example, selling a license to use a single page of protected material may have an economic value of only a fraction of a cent. Because the cost of familiar business methods is so high, this type of business has not yet been developed in our digital economy. As Buyer 30 pays the monetary value of CD 10 in advance, there are no credit losses in the current implementation system. Furthermore, there is no cost to process credit applications and the unused balance sheet on CD 10 actually represents the time value of the money available to the operator. This value further reduces the cost of implementing and using the present implementation method.

The system described in Figure 2 can be economical for small dollar snippets. A further advantage of using an optical storage medium as an exchange medium is that additional data can be input to the optical disk 10. Such data may, for example, constitute advertising information. Customer 30 may see this advertising information when the optical disk 10 is used on the customer 30's computer. As an incentive for the buyer 30 to view the advertising information, the optical disk 10 may be filled with data representing a second monetary value that the buyer can estimate 30. In addition to using the optical disk to obtain an io of the first item from the seller 20, as shown in In Figure 2, another value or object can be delivered to the customer 30 after the customer evaluates the advertising information. For example, another monetary value in the form of a discount or rebate may be delivered to customer 30 whenever the customer 30 executes a specific computer readable code on the optical disk 10. The information stored on the optical disk 10 may include a list of advertisers willing to offer a discount or a reward to customer 30 using an optical disc

10. The value of such advertising will serve to bring to market this form of e-commerce.

A customer 30 or another person who owns an optical disk 10 can use the Internet to determine the current value of an optical disk 10. A software component written on an optical disk can be used to communicate with the operator 40 over the Internet to display the current cash the value of the optical disk 10 on the customer's computer 30. This is an important process because the initial monetary value assigned to the optical disk 10 may be modified by the operator 40 as a result of previous transactions. Operator 40 may determine the revised monetary value of optical disc 10 after a trade transaction. The revised monetary value may be a function of the initial monetary value and the price of the item purchased in the early business. The second monetary value may simply be the first monetary value minus the price. Alternatively, the operator 40 may further reduce the monetary value to reflect the user charge against the value of the optical disk 10 to cover the cost of the transaction, io Conversely, the relationship between the initial monetary value and the other monetary value may be an additive function, i.e. the second monetary value may be higher than the first monetary value as a result of re-powering the optical disk 10 from the customer 30. Buyer 30, who supplies credit card account information to operator 40, can then recharge via the Internet. Similarly, the value of the optical disk 10 may be increased as a result of the use of advertising information entered by the customer 30 on the optical disk 10.

Operator 40 may prepare a web site to provide other services to the buyer 30 and the seller 20. In addition to being able to confirm the current value of the optical disk 10 as described above, the customer 30 may keep a record of the consumption of each optical disk 10. In the second pages, this information may be stored locally on the customer's computer 30. Customer 30 should be advised that locally stored information may not be accurate if the optical disk 10 has been used on more than one computer. The operator's website 40 may contain links to other vendors 20 that accept payment using this form of e-commerce.

Optical disc 10 may contain data that represents other types of information, such as music or software. By combining data representing monetary value with data representing another consumer product, the implementation of this form of e-commerce can be accomplished at a reduced initial cost. Furthermore, the monetary value entered on the optical disc 10 with other consumer goods may represent a rebate on the price of the consumer product. This is the electronic equivalent of a rebate coupon for a consumer product.

Optical disc 10 may contain hidden information that is duplicated on multiple sections of the disc to mitigate the potential for the disc to become unusable after physical damage. If the information cannot be read from the disk in its primary location, the software component that controls the approval process will attempt to read the data from other parts of the disk. Users are prevented from guessing passwords by allowing a limited number of retries over a period of time. Other security schemes may be used to prevent the abuse of the system shown in Figure 2, but the maximum incentive for so-called theft is limited to the initial value of optical disk 10. Since the initial value of optical disk 10 may be only twenty dollars or less, there is little incentives for so-called places to develop fraudulent derivations of the inventor process. Due to the natural security of the system and because the buyer 30 has paid in advance for the optical disk 10, sellers 20 may be encouraged to accept this form of payment. Many forms of information are currently being provided online for free because the economic value of such information is very small on a business basis. The medium of exchange described herein is naturally effective and can be used for such micro-transactions, thereby providing a large market that has not been economically viable until now.

io As for real money, there would be no compensation for lost or unused optical disc 10. Optical disc 10 may be valid for a limited period, such as six months, to simplify the financial record required by the operator 40, and further to ensure that that the advertising information entered on the optical disc 10 remains current. Further, customer 30 may select and restrict the use of the optical disk 10. For example, customer 30 may communicate with operator 40 to enforce a password restriction on a dedicated optical disk 10. Similarly, customer 30 may advise operator 40 to restrict the classes of websites to which payments can be forwarded, such as to prevent in order to use the optical disc 10 provided to the child to purchase products or services on the adult website.

The cost of operating an Internet trading system as described in the figure

2, preferably determined by the vendor 20. This can be accomplished by deducting a commission or user fee from the amount of any payment that has filled the vendor's account 20. Since the optical disc 10 is prepaid and has the economic advantages described above, any such a commission or fee is much less for the seller than current credit card transactions. Further, the time value of money available to the operator 40 from unused and lost optical disks 10 further reduces the amount of costs to be reimbursed by the seller 20.

Figure 3-9 shows the appearance of a computer screen from customer 30 during Internet commerce in accordance with the method shown in Figure 2. Figure 3 shows the customer 30 visiting a website where the payment method according to the current embodiment is accepted as indicated by the logo CD MONEY displayed on screen. As part of this site, Seller 20 gives Buyer 30 access to the screen shown in Figure 4, which shows a list of games that can be purchased online. The screen allows the buyer 30 to choose a game, number of games and payment method including CD MONEY.

Once the command is entered, the software component received from vendor 20 asks the buyer 30 for confirmation of the payment method and price, as shown in Figure 5. After this confirmation is accepted, the buyer 30 is reminded to enter identification code 14 and the other data from the optical disk 10 is transmitted to the operator 40. Operator 40 confirms that the current value of the optical disk 10 is greater than the price specified for the object to be purchased and is required by the customer 30 to confirm the purchase, as shown in Figure 7. With payment approval, as shown in Figure 7, the buyer 30 forwards to the seller 20 the confirmation delivered by the operator 40, as mentioned in connection with step 7 in Figure 2. Once the transaction is completed, as shown in Figure 8, the buyer 30 is authorized to play the purchased game as shown in Figure 9.

Figure 10 shows how customer 30 can confirm the current monetary value 5 of optical disk 10. Figure 10 shows a web page provided by the operator 40 and allows the customer 30 to choose from several options, including checking the value of optical disk 10, re-powering optical disc 10, requesting more information, and links to other websites provided by vendors 20 that accept this form of payment. Figure 11 shows a screen available to the customer 30 to check the value of the optical disk 10. This screen requires the customer 30 to enter an identification number 14 associated with the optical disk 10 and to insert the optical disk 10 into the disk drive of the computer. Figure 12 shows a response screen provided by the operator 40 and shows the current value of the optical disk 10.

Figure 13 shows how the operator 40 can display the data used for a specific optical disk 10 on the customer's computer 30.

The embodiments of the invention described herein are prepared by way of drawings and without limitation. Therefore, the scope is not limited thereto, but is described in the appended claims.

For:

CD-CASH (USA), LLC

PATENT APPLICATIONS